Moving from Access to Inclusion: New CFI report takes stock of progress – and pitfalls – on the road to full financial inclusion

Can the world achieve full financial inclusion by 2020? By the Numbers: Benchmarking Progress Toward Financial Inclusion, a new Financial Inclusion 2020 (FI2020) publication from CFI, offers a quantitative review of financial inclusion globally, using publicly available data to examine recent progress and projecting a scenario out to 2020.

Last month the development community emitted a collective cheer as the new Global Findex data revealed that the number of unbanked individuals around the world dropped from 2.5 billion to 2 billion between 2011 and 2014. This looks like huge progress. If the trends continue, the financial exclusion gap will close to 1 billion individuals without access to formal financial services by 2020.

However, know it’s not all about access. We promote financial inclusion to enable people to use financial services to better manage their lives. A fully included person is an active user of quality financial services that bring significant value. Expanding financial access is the first step towards financial inclusion, and it needs to be followed by an uptick in the frequency and ways in which people use services as well as strengthening of the financial ecosystem. By the Numbers explores progress in these areas along with access and estimates the potential for reaching full inclusion by 2020.

Here are some of our “headline” observations in the publication:

The world – every region, income level, and “slice” of the global population – is moving toward greater financial access. (See the slideshow below for a breakdown of excluded adults by region.)

As we get closer to universal access, financial exclusion will look different than it does today. Exclusion will be more hidden – in harder to reach population segments, in slow growth countries, and in inadequate products that are not actively used to improve lives. Emphasis needs to turn to “leaving no one behind” and to offering services that make a real difference.

Active use of services continues to be a problem. In low and middle income countries, the percent of account holders who use their accounts to withdraw three or more times per month remains very low and is not growing, a direct contrast to the active usage patterns seen in high income countries.

The “technology revolution” in financial services is no longer news. Inexpensive, small-footprint delivery channels like agents and ATMs have outpaced expensive branches. An ever-improving communications infrastructure and enabling policies make this possible.

We expect to see creativity in product design and delivery channels built on this infrastructure with the rapid rise of smartphones and the decreasing cost of technology.

Policy makes a difference. Countries that develop a strategy to pursue financial inclusion saw twice as much growth in account ownership in the last three years as those who had no strategy or simply made a commitment. Increased attention to financial inclusion policy and regulation—from standard-setting bodies, international organizations, and individual governments—is very encouraging, but more work is needed to better understand what policies are best.